Correlation Between Alger Small and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Alger Small and Eaton Vance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alger Small and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alger Small Cap and Eaton Vance Risk, you can compare the effects of market volatilities on Alger Small and Eaton Vance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alger Small with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Small and Eaton Vance.

Diversification Opportunities for Alger Small and Eaton Vance

0.45

Correlation Coefficient

Alger Small  Eaton Vance

Very weak diversification

The 3 months correlation between Alger and Eaton is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alger Small Cap and Eaton Vance Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Risk and Alger Small is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alger Small Cap are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Risk has no effect on the direction of Alger Small i.e., Alger Small and Eaton Vance go up and down completely randomly.

Pair Corralation between Alger Small and Eaton Vance

Assuming the 90 days horizon Alger Small Cap is expected to under-perform the Eaton Vance. In addition to that, Alger Small is 2.0 times more volatile than Eaton Vance Risk. It trades about -0.07 of its total potential returns per unit of risk. Eaton Vance Risk is currently generating about 0.0 per unit of volatility. If you would invest  927.00  in Eaton Vance Risk on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Eaton Vance Risk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Alger Small Cap  vs.  Eaton Vance Risk

Alger Small Cap

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Small Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Alger Small may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Eaton Vance Risk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Risk are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Alger Small and Eaton Vance

The main advantage of trading using opposite Alger Small and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Small position performs unexpectedly, Eaton Vance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eaton Vance will offset losses from the drop in Eaton Vance's long position.

The idea behind Alger Small Cap and Eaton Vance Risk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.